House prices jump 1.6% in April to reach yet another record high with lack of properties available to buy the main catalyst
05-09-2015
- UK house prices soared another 1.6% in April compared to March
- On an annual basis, prices were 8.5% higher in the three months to April
- It means prices are at another record high of £196,412. Halifax says
By Camilla Canocchi for Thisismoney.co.uk
House prices soared another 1.6 per cent in April as the supply of properties available for sale continues to remain tight, according to a leading monthly index.
The average property price in Britain now stands at another record high of £196,412 – up £3,084 compared to March, when house prices had grown by a slower monthly rate of 0.6 per cent.
On an annual basis, prices were 8.5 per cent higher in the three months to April compared to 8.1 per cent in the three months to March, the latest figures from Halifax reveal.
Rising prices: The average UK house price now stands at another record high of £196,412, Halifax figures show
While price growth has cooled compared to last summer, when annual growth hit a record high of 10.2 per cent in July, demand remains high thanks to low mortgage rates.
Martin Ellis, a housing economist at Halifax, said: 'Housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates.
'At the same time, supply remains very tight with a general shortage of properties available for sale. This combination has kept house price inflation steady in recent months.'
The data follows on from Nationwide's latest report, which found that house prices rose one per cent in April - the largest increase since June 2014.
Howard Archer, chief economist at IHS Global Insight, said there seemed to be a clear upward move in house prices last month.
He said: 'With housing market activity seen gradually picking up over the coming months, we forecast house prices to rise by around 5 per cent over 2015.
'However, the latest data suggest that there are mounting upside risks to this forecast.'
Halifax expects price growth to slow down in the coming months to reach three to five per cent towards the end of the year as house price inflation continues to rise faster than wages.
Martin Ellis added: 'The resulting rise in the level of house prices in relation to earnings should constrain house price growth and activity over the remainder of the year.'
Borrowers' appetite for mortgages decreased significantly in the first quarter of the year, the Bank of England reported last month, which means lenders have seen demand fall more sharply than at any point since the financial crisis in 2008.
New instructions fell again in March, according to the latest figures by the Royal Institution of Chartered Surveyors, and have been falling for the past seven months with the exception of January.
This fall in instructions has contributed to the supply of homes on the market remaining low, Halifax said.
The report comes as housebuilders across the UK are set to build 18 per cent more homes in the coming months, according to figures by the National House Building Council.
Some 40,281 new homes have been registered by housebuilders between January and March this year at industry body the National House Building Council, compared to 34,163 in the first quarter of last year. This, however, is still well below 2007 levels and below what is considered to be the amount of new homes needed.
As house prices continue to soar, first-time buyers expectations continue to fade, with a separate recent report by Halifax suggesting that more people are giving up on owning their own home.
The proportion of people saving for a deposit has dropped by 6 per cent over the past year, with 43 per cent saving to buy a property compared to 57 per cent who are not, Halifax said.